General Changes:
-Give the AI new and improved unit formations (ones that don't suck!) to increase difficulty
-As the game progresses, give the AI increasingly more powerful units over the player, thus requiring some strategy to take them down.
-Greatly improve the performance of large monsters.
-Deny player access to recruiting high tier units. What this means is no longer can you use leaders to recruit high tier units, get them from neutral encounters, nor get them from the Charm item (they are immune). High tier units must be gotten through class progression. The reason for this is it was necessary to increase the difficulty later on in the game.
-Performance of str chars has been slightly improved relative to int chars, though you can still expect the backrow to out-power the front row.
-Performance of special characters has been slightly lowered.

Class Changes:
-Two new classes: Siren (upgraded form of Witch) and Diana (physical female class that can perform in either row)
-Dragoner/Dragon Master improved and changed to female (like the Ogre Battle games that followed in the series), cherubim and pixie were removed to make these (faerie now promotes into sylph and angel now promotes into seraphim, faerie and angel have been improved to have pixie and cherubim performance to start with)
-Zombie Dragon is now lower tier than Tiamat and does not require an item to promote into
-Lich is reduced to 2 attacks in back
-Princess does not give herself her leadership bonus
-Witch Stun replaced with Hex (randomly use Phantom, Petrify, or Charm)
-and more...

Item Changes:
-The following items are now unbuyable: Joker, Charm, Sunshine, Moonbeam, and permanent stat boosting items.
-Some low tier EQ can now be bought in shops.
-The crappier half of the game's equipment has all been improved.